Liverpool would have the option to buy the 22-year-old for around £7 million next summer if the loan deal was successful.

Melgarejo, who played for Benfica against Chelsea in last season’s Europa League final, has been linked with Arsenal and Fenerbahce during the summer.

Liverpool need to apply for a work permit to complete the signing, though, as the defender has only one international cap for Paraguay.

UK laws rule that any footballer from a country outside the European Union must have played 75% of his national team’s senior competitive games over the past two years in order to qualify automatically for a work permit. In addition, that country must be in the top 70 of FIFA’s rankings when averaged over the past two years.